Foreign creditors
start discussion group
Imminent decision

on March Eurobond expected

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Foreign creditors, including Greylock Capital and Mangart Advisors, announced the formation of a discussion group as Lebanon lacks political consensus on paying upcoming expiring Eurobonds.

“This group will facilitate communication between disparate creditors and stands by to engage with the Lebanese Republic in any discussion,” said the statement from the two firms. It said that they will begin evaluating options for how lenders will manage the developing situation in Lebanon.

The government has been seeking advice on what to do about an expiring Eurobond in March. It is expected to make a decision imminently.

Lebanese banks are holding the bulk of the sovereign debt. They are pressuring the government to pay the March Eurobond on time.

The Association of Banks in Lebanon (ABL) said it was necessary to repay the Eurobond on time to maintain Lebanon’s place and relationships in global financial markets. It said the short time remaining before the March 9 maturity did not allow for preparation and “competent handling,” and called for the public debt to be tackled right after the March payment. (see story)

Prime Minister Hassan Diab said that the priority would be preserving foreign currency reserves for critical imports, and that “all possibilities” were under study for dealing with Eurobonds maturing this year.

Several political parties and members of protesting members of civil society have opposed the payment of the Eurobond.

Last month, the Central Bank was asked by the former government to halt plans for a financial engineering scheme that involved swapping expiring Eurobonds with a new issue.

On Tuesday, the March 9, 2020 Eurobond carrying a 6.375 percent coupon was traded at $92.5, yielding 108 percent.
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Date Posted: Feb 13, 2020